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California-based Amyris has used breakthroughs in synthetic biology
to reinvent biofuels. To turn its technology into an industrial process, it has headed to the land of sugar: Brazil.

Sugar Nation: Workers stockpile sugar at a sugarcane mill in the Brazilian state of São Paulo. Brazil is the world’s largest producer and exporter of sugar. The country may play a key role in producing the next generation of biofuels.

The four-lane Anhangüera Highway leads northwest from Brazil’s financial capital, São Paulo, into some of the most productive agricultural land in the world. The view from a car window reveals plantations of hairy eucalyptus trees and cow pastures rife with termite mounds. Fields of sugarcane roll out of sight over the hilltops.

Turn right at kilometer 104.5 and you enter Techno Park, a tidy corporate research neighborhood that looks as if it has been torn out of suburban California. And in a way, it has. In a building not far from the entrance are rows of neatly organized workstations, shiny fermentation tanks, and clanking centrifuges. All this machinery is a near-exact replica of the equipment at a facility in Emeryville, CA. Even the coat racks are the same.

The building is the Brazilian outpost of Amyris Biotechnologies, a U.S. research outfit celebrated for its work under a grant from the Bill and Melinda Gates Foundation to make a scarce malaria drug more widely available. Its founder, Jay Keasling, is considered a pioneer of synthetic biology, and the malaria project, which could save many thousands of lives, has been featured in the New Yorker. Last May, Keasling was awarded the Biotechnology Industry Organization’s first Biotech Humanitarian Award.

Less well publicized is that Amyris has raised more than $170 million in venture capital to get itself into the biofuels business and that its current plans call for producing nearly all that fuel in Brazil. Roel Collier, a Belgian fluent in Portuguese who heads Amyris’s Brazil operations, points to a 12-meter-tall steel tank in which genetically modified yeast is feasting on the juice of the sugarcane that is so abundant in this country. “Inside is cutting-edge American technology applied to the competitive advantage of Brazil,” he explains.

For the last two years, Collier’s responsibilities have included shipping drums of frozen Brazilian sugarcane juice to Amyris’s California laboratory, some 10,000 kilometers away. There, scientists have been genetically rewiring ordinary yeast cells to digest caldo de cana, as the juice is called, and turn it into farnesene, a fragrant oil that Amyris has shown can be converted into diesel fuel. In the fast-moving field of synthetic biology–a discipline that looks to rewrite the DNA of microörganisms as if it were computer code–the California laboratories of Amyris are considered state of the art. Researchers create and test tens of thousands of engineered yeast strains each week. The company employs nearly as many PhD yeast geneticists as all the universities in Brazil.

Feedstock: A sugarcane plantation near the city of Campinas. Each acre yields enough sugarcane juice to make 3,000 liters of ethanol.

But Brazil offers Amyris one critical advantage over the United States: the economic conditions there lend themselves to exploiting the technology commercially. Brazil is the world’s most efficient producer of sugar. Huge mounds of it pile up at the country’s 420 sugarcane refineries. With its tropical weather and aggressive business culture, the country dominates the global sugar trade. And enormous supplies of inexpensive sugar are the key to making Amyris’s technology practical.

“The reason to go to Brazil was pretty clear; it’s the cheapest, most readily available source of sugar to power the technology platform,” says Keasling, a professor of biochemical engineering at the University of California, Berkeley, who also heads the Joint BioEnergy Institute, a $135 million effort funded by the U.S. Department of Energy to extract sugars from wood chips, grass, and other inexpensive plant matter. In 10 to 15 years, its work could make sugar molecules as cheap to obtain in the U.S. as they currently are in Brazil. For now, though, the U.S. biofuels industry continues to make ethanol by fermenting the glucose in corn kernels. And corn is a relatively costly source of sugar, as the American ethanol industry has discovered to its distress. Despite taxpayer subsidies, U.S. manufacturers have not been able to turn consistent profits.

The story is different in Brazil, where sugarcane mills have been turning out inexpensive ethanol since the government launched a push for fuel independence in the 1970s. The country’s automobile fleet now consumes more ethanol than gasoline. Nearly 90 percent of cars manufactured in Brazil can run on the biofuel. The industry has realized that “geography is destiny,” says Mark Bunger, research director at Lux Research, a New York firm that studies the commercialization of emerging technologies. In ­Bunger’s view, only a few places on the planet have the rain, sun, and land mass needed to make biofuels at the scale and price that can have a real impact. “The understanding that we are coming to is that it’s never going to happen in some places,” he says, “and Brazil is the first place where the economics make sense.”

Amyris reached a similar conclusion about three years ago–hence its identical fermentation labs in Emeryville and Brazil. Scientists in California tinker with yeast to make it convert sugar to farnesene more quickly; then the bugs are airmailed south for testing under tropical conditions. This year, Amyris plans to begin construction of a towering fermentation complex in the Brazilian state of Goiás. When it’s done, it should be able to produce 100 million liters of

green diesel fuel every year.

Like ethanol, Amyris’s fuel will be made by fermenting sugar. But company scientists have redesigned yeast so that the microbes process it into combustible hydrocarbons instead of alcohol. That means the competition for its green fuel is not ethanol but diesel made from petroleum and also biodiesels made from vegetable oil or animal fat. Amyris says its fuel has a number of advantages over both. Unlike fossil fuels, it is made from a renewable source. It also contributes less greenhouse gas to the atmosphere: the company calculates that its Brazilian-made diesel will emit about 80 percent less greenhouse gas than conventional diesel. And compared with other biodiesels, its sugar-based fuel will be cheaper to make and will enable engines that use it to run better. Amyris’s CEO, a former oil executive named John Melo, has been negotiating with companies that are looking for a green fuel, including Federal Express, Virgin Atlantic, and General Electric.

Yeast Factory: At Amyris’s demonstration facility in Brazil, hydrocarbons are produced in a fermentation tower.

For many synthetic biologists, diesel is just the beginning. They believe that in principle, they can create microörganisms to produce replacements for any petroleum product. But there are huge risks. Amyris’s yeast strains have proved unexpectedly vulnerable. And as with other biotechnology processes that depend on live microörganisms, no one can say if green diesel production can be scaled up economically from the 1,000-liter batches produced today. “All the forecasts are based on efficiencies of scale for processes that have never been run at those scales,” says ­Noubar Afeyan, CEO of Flagship Ventures in Cambridge, MA, and a cofounder of LS9, a competing synthetic-biology startup. A major challenge is that it “takes hundreds of millions of dollars to prove it, even at medium scale.”

Nine years ago, Amyris’s technology was still a bench project in Keasling’s Berkeley laboratory. Researchers had been looking at ways to coax microörganisms to produce commercially useful products. By adding DNA from plants and bacteria, Keasling’s lab eventually designed new bacteria and yeast cells that could make large quantities of isopentenyl pyrophosphate. With its five carbon atoms, the chemical is a sort of Lego block of the natural world; from it, plants and animals build isoprenoids, members of a large class of molecules that includes the anticancer drug taxol, vitamin E, and scents such as those of grapefruit and the pheromones of female cockroaches.

Keasling knew the invention was valuable, and in 2001 he filed the first patent application of his career. “We wanted to apply the tools to a real problem,” he says. The chance came in 2004, when the Bill and Melinda Gates Foundation decided to donate $42.6 million to a project that would manufacture the antimalaria drug artemisinin with the aid of Keasling’s made-to-order microbes.

Artemisinin is currently derived from the sweet wormwood plant, grown mostly in Africa and Asia. Supply of the drug is unsteady, and prices swing wildly; they reached $1,100 a kilogram in 2006. By using genetically modified yeast to produce it from sugar, Keasling’s approach promised to solve the supply problem and dramatically cut the price. With its chance of saving thousands–perhaps millions–of people who might otherwise die of malaria, the project has become a symbol of synthetic biology’s potential to change the world for the better. The Gates money paid for the rapid expansion of Amyris, which Keasling and three of his postdocs founded to carry out the malaria project. By late 2005, says Amyris’s chief technical officer, Neil Renninger, some at the company were spending “nights and weekends” thinking about what other problems their technology could solve.

Amyris estimates that the isoprenoid family includes some 50,000 different types of molecules, so it was far from clear where to focus next. “When we began pitching the VCs, we said there are some drugs we think are interesting, and nutraceuticals, and even fuels–what do you think?” recalls Renninger. But it was hard to find a project as meaningful to Amyris’s scientists as malaria. “This was really a culture of people that want to save lives and not make a lot of money,” he says. “So when you throw making grapefruit flavor in front of them–well, it’s not too interesting.”

Things started changing by mid-2006, when two of Silicon Valley’s best-known venture capital firms, Kleiner Perkins Caufield and Byers and green-energy specialist Khosla Ventures, offered to invest $20 million in the company. The U.S. Congress had passed renewable-fuel mandates in 2005, setting off a wave of speculative investment in all sorts of biofuels. Geoffrey Duyk, a managing director at TPG Biotech, which also put money into the company, recalls that once Amyris accepted the funds, the investors “came in and moved the focus to fuels.”

The investors began courting Melo, then head of British Petroleum’s North American fuels business, to be Amyris’s CEO. Melo was running what he calls a “nice little business” involving huge truck fleets and scores of terminals, generating $34 billion in revenue. When a recruiter first called him about a biotech company with a malaria project, he recalls, “My reaction was, ‘You have got to be kidding. I am a fuels guy,

so what do I care?’ “

As he learned more about synthetic biology and met Amyris’s scientific staff, Melo changed his mind. Fuels are the largest of all businesses by revenue, but as a percentage of profits, oil companies spend only tiny sums on R&D and almost nothing on basic research. Melo decided his old industry was ripe for change. “The ability to modify microbes [means] we can be the Microsoft of fuels and chemicals, where we are in effect writing the software that goes into the fermentation tank,” he says. “That, to me, was game changing.” Melo directed the company to work on diesel, the world’s most widely used transportation fuel and one that is often in short supply. Producing the right type of molecule proved surprisingly easy. Within six weeks, the scientists had switched a single enzyme in their artemisinin-producing bugs and begun producing farnesene, the oil they had identified as a potential precursor to diesel.

“They look like very different projects–one is a medicine and one is a fuel–but the metabolic route is similar,” Collier says. “That was the big advance of Amyris.” Farnesene is a pleasant-smelling oil that accounts in part for the odor of apple skins. By performing one additional chemical step, hydrogenation, Amyris can turn the yeast-produced farnesene into farnesane, a highly combustible fuel with properties similar to those of diesel.

Yeast strains are tested for efficiency.

As a hydrocarbon like diesel and gasoline, farnesane won’t be subject to the problems that have affected other biofuels, Amyris is betting. Ethanol, for example, can mix with water, which may cause trouble when water makes its way into gasoline pipelines. Plant-derived biodiesels, meanwhile, contain impurities and can clog engines at low temperatures. Farnesane, on the other hand, can be simply dropped into the existing fuel distribution network. It even has an advantage over ordinary diesel: it contains no polluting sulfur.

But the project will have an impact only if it can be deployed at a massive scale. And no one is yet sure how well synthetic biology will work at such scales. Synthetic Genomics, a company started by gene-sequencing pioneer J. Craig Venter, reached a $300 million agreement with ExxonMobil last year to develop fuel-producing algae. Yet Exxon’s vice president for research and development, Emil Jacobs, told the New York Times that he didn’t want to “sugarcoat” the project’s chances. “For transportation fuels, if you can’t see whether you can scale a technology up, then you have to question whether you need to be involved at all,” he said.

The ability to make fuels in astonishing quantities isn’t the only thing needed for them to become a realistic option. They are also commodities that are sold at rock-bottom prices. The petroleum industry’s product, liter for liter, is half the price of Coca-Cola. Where were the main costs going to be in Amyris’s production process? If ethanol-industry averages held true, the sugar its yeast feed on would represent over half the final price of making farnesane.

Those calculations were part of what led Melo to “plant the flag firmly in Brazil,” recalls investor Duyk. American corn, though close at hand, would have been a poor bet. By 2007, booming U.S. ethanol production had sent corn prices soaring so high that tens of thousands of Mexicans demonstrated over the cost of tor­tillas. When oil prices fell in 2008 and corn prices remained at record levels, many U.S. ethanol makers could no longer make a profit.

A worker holds bottles of Amyris’s final product, diesel fuel.

Scale, cost, and competition with food supplies aren’t the only issues for biofuels. Amyris wanted to market its diesel as good for the environment; its brochures claim that its “No Compromise” fuels will release 80 percent less carbon dioxide into the atmosphere than fossil fuels. Today, Brazilian sugarcane is the only crop that can possibly back up Amyris’s green marketing. Brazilian studies say that sugarcane ethanol yields about 7 to 10 times as much energy as it takes to produce the fuel; in contrast, ethanol made from corn yields just slightly more than producing it consumes. While the environmental impact of growing sugarcane remains in dispute, it’s clear that the process requires less energy than cultivating corn. What’s more, Brazil’s biofuel producers are more efficient than those in other countries, partly because many Brazilian mills burn sugarcane waste to power their crushers and distillers, reducing the use of fossil fuels.

As a market, Brazil may bring other advantages, too. The country’s demand for diesel is high, so Amyris could build a respectable business without ever exporting a drop. Brazil also has space to increase production: sugarcane is now planted on about 3 percent of Brazil’s arable land, but the crop could expand onto more than 100 million acres currently used for grazing cattle. “You could probably quadruple and quintuple the cane production,” says Bill Haywood, the CEO of LS9 and a former oil company executive. “That is poorly understood by the rest of the world. I think that Brazil is going to be the birth of high-quality

green diesel, just as it was for ethanol.”

In December, Amyris reached an agreement to build its first farnesene plant, a 100-million-liter-per-year facility that will be constructed inside the newly built Boa Vista sugar and ethanol mill in Goiás. As part of the transaction, Amyris agreed to buy a 40 percent stake in the mill from its owner, Grupo São Martinho. Its total payment, around $80 million in cash and stock, was the highest price ever paid for milling capacity in Brazil, according to São Martinho’s president, Fábio Venturelli. Amyris wanted control over the construction of its first big plant, to make sure it goes smoothly. But eventually the company plans to barter its technology for access to sugarcane juice, a less expensive approach. The idea is to have Brazil’s sugar mills pay to retrofit their plants while Amyris contributes its genetically modified yeast. Amyris would then sell the farnesene and divide the profits with the mill.

Although the commercial terms may be complicated, the basic pitch Amyris is making isn’t: in an industry that in many ways is low tech (more than half of Brazil’s sugarcane is still hacked down by machete-wielding day laborers), it promises to turn mills into futuristic biorefineries capable of turning out chemicals and fuels more valuable than sugar or ethanol. Many Brazilian companies have been thinking along similar lines. When Venturelli became São Martinho’s CEO in 2008 and first saw the blueprints for the Boa Vista mill, he noticed that someone had written a note on a blank area. It read, “This space for future sugarcane-based chemical.”

Plenty of questions remain, though. “All our companies are searching to be at the forefront of the fuels market, and they see in Amyris the chance for technology transfer,” says Alfred Szwarc, a technical advisor to UNICA, Brazil’s largest sugarcane association. “But since we don’t know the price or the operational costs, for now it’s a lot of speculation.”

The major uncertainty is how Amyris’s yeast will perform under industrial conditions. It will be one of the first times synthetic biology has reached such a scale, and the process is certain to pose engineering problems no other company has faced before. One concern: wild yeast strains could ride into the fermentation tanks along with the sugarcane juice. In sterile lab experiments, that’s not a problem. But in a sugarcane mill, yeast that doesn’t make farnesene could easily overwhelm the lab-created variety.

Recent developments in the artemisinin project also suggest that costs could be an issue. Drug maker Sanofi Aventis, which agreed to handle commercial production of the antimalarial, says it ran into unexpected obstacles and now plans to produce the drug for $350 to $400 per kilo. That is close to the average price of the plant-derived version, but it’s three to four times as expensive as Keasling has promised in media interviews.

In Brazil, Amyris’s dreams of transforming the global fuel business may need to be deferred, at least for a time. The company’s first facility may not produce farnesene cheaply enough to compete head to head with diesel. Instead, the farnesene produced by the São Martinho mill will initially be sold to the consumer-products market, where it may command prices far higher than what’s paid for diesel. (It can be used, among other things, as a moisturizing agent for lipsticks or antiaging creams.)

That means Amyris’s scientists may have to wait a while longer to change the world. But Melo says the company has not backed away from its goal of becoming a major force in the fuels market. “We are all about impact,” he says. “Saving thousands of children is impact. With fuels, it’s scale. If we can’t scale our contribution to CO2 [emissions] or green production, we will be irrelevant.”

Antonio Regalado is a contributing correspondent for Science in Latin America and a former editor at TR. He is based in Sao Paulo.

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I am the senior editor for biomedicine for MIT Technology Review. I look for stories about how technology is changing medicine and biomedical research. Before joining MIT Technology Review in July 2011, I lived in São Paulo, Brazil,… More where I wrote about science, technology, and politics in Latin America for Science and other publications. From 2000 to 2009, I was the science reporter at the Wall Street Journal and later a foreign correspondent.

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